HCW Biologics Inc.
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 31, 2026
HCWB$1.02-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-28.
0000950170-25-046724
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-31.
0001193125-26-134934
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 168 previous paragraphs and 226 current paragraphs.
80 unchanged; 37 reworded; 107 added; 46 removed; 5 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (107)
Current report
HCW Biologics Inc. (“HCW Biologics” or the “Company”) is a clinical-stage biopharmaceutical company developing transformative fusion immunotherapeutics to support or treat diseases promoted by chronic inflammation. We have created novel compounds that represent a new class of drugs that we believe have the potential to fundamentally change the treatment of autoimmune disorders and other proinflammatory diseases, cancer and senescence-associated dysplasia. Among other things, we have begun commercialization of certain commercial-ready proprietary compounds for use as reagents in the production of immunotherapeutics for the treatment of infectious diseases and cancer. We want our products to improve patients’ healthspan as well as their quality of life, and possibly extend longevity.
Current report
HCW Biologics has an experienced team led by Dr. Hing C. Wong, our Founder and CEO, who discovered and developed the immunotherapeutic Anktiva® (also known as ALT-803, an IL-15 receptor agonist) through pivotal trials. This blockbuster immunotherapeutic treatment for cancer was sold to ImmunityBio, Inc. in 2017 in a $1.0 billion acquisition. In April 2024, Anktiva® was approved by the U.S. Food and Drug Administration for its first indication, the treatment of BCG-Unresponsive Non-Muscle Invasive Bladder Cancer.
Current report
The Company utilized its proprietary drug discovery and development platforms to create novel fusion immunotherapeutics, including multi-specific cytokines, targeted second- generation immune checkpoint inhibitors, and immune-cell engagers, which have the capabilities to rebalance immune cells to reestablish immune tolerance or rejuvenate subsets of immune cells that specifically target cancerous and infected cells, and accumulated, nonfunctional senescent cells. Our specialty is to develop treatments administered by subcutaneous injection, with an eye toward cost containment and cost savings as well as quality-of-life for patients.
Current report
Advancing our programs may be accomplished through Company-sponsored programs or with a corporate partner. Business development transactions are considered a key aspect of our financing strategy. We continually assess our programs to determine the optimal path to successfully complete clinical development and launch commercialization.
Current report
The Company has selected the following compounds for our clinical development programs, which are currently being developed in Company-sponsored programs:
Current report
HCW9302 is a clinical-stage compound that is an injectable, first-in-kind interleukin 2 (“IL-2”) fusion protein complex constructed using the Company’s proprietary TOBI platform technology. Its mechanism of action involves binding to IL-2αβγ receptors predominantly expressed on regulatory T (“Treg”) cells, thereby activating and expanding Treg cells that can suppress unwanted immune and inflammatory responses. Beijing Trimmune Biotech Co., Ltd. (“Trimmune”) has an option to license the rights to the China market for HCW9302.
Current report
HCW11-018b is a preclinical molecule that is a novel, tetra-valent T-Cell engager we call the Big BiTE, since it consists of a BiTE (common for all T-Cell Engagers) and an Enhancer (which makes the HCWB T-Cell Engager the “BIG BiTE”). HCW11-018b is designed to address key challenges for first generation T-Cell Engagers: manufacturability, preclinical safety profile, and ability to treat solid tumors.
Current report
HCW11-040 is a preclinical molecule that is a unique combination of cytokines and pembrolizumab, a generic form of Keytruda®, in a multi-functional fusion molecule. This lead product candidate exhibits the ability to expand Tpex cells without a cytokine storm in preclinical studies. In addition, it exhibits superior immune-cell activation, expansion, and cytotoxicity against cancer cells and tumors when compared to pembrolizumab in in-vitro and in-vivo studies.
Current report
HCW9302: On November 17, 2025, the first patient was dosed at The Ohio State University Wexner Medical Center for the Company-sponsored, multi-center first-in-human clinical trial to evaluate HCW9302 in patients with alopecia areata (NCT07049328). This marks a major milestone in the Company’s clinical development program in autoimmune diseases. A preliminary human data read out for this study is expected in the first half of 2026.
Current report
HCW11-018b: IND-enabling activities are expected to be completed in the first half of 2027. The Company intends to file an IND application shortly thereafter, for authorization to evaluate HCW11-018b, our second-generation T-Cell engager, in patients with pancreatic cancer.
Current report
HCW11-040: IND-enabling activities are expected to be completed in second half of 2027. The Company intends to file an IND application shortly thereafter, for authorization to evaluate HCW11-040, our second-generation immune checkpoint inhibitor, in neonatal infants with a chronic lung condition called BPD.
Current report
Business Development Transactions
Current report
Beijing Trimmune Biotech Co., Ltd. License
Current report
The Company is developing HCW11-006 through a corporate partnership with Beijing Trimmune Biotech Co., Ltd. (“Trimmune”). Trimmune is a new operating entity formed for the purpose of development and commercialization of HCW11-006, by WY Biotech Co., Ltd. (“WY Biotech”), a China-based company specializing in the early-stage development of recombinant protein drugs and gene/cell therapies, and the Company. Trimmune investors include CITIC Medical Fund, a multi-billion-dollar investment fund focused on innovative companies primarily targeting pharmaceuticals, biotechnology, medical devices, and diagnostics, and TigerYeah Capital Fund of TigerMed, a global leading Contract Research Organization. Trimmune is led by a team with an impressive track record for success in the development and commercialization of innovative drugs that treat diseases with large, unmet medical needs for the Chinese market. HCW11-006 is a preclinical molecule that combines several different immune functional domains as part of a group of compounds characterized as multi-functional immune cell stimulators.
Current report
As of March 16, 2026, we received the full payment of the upfront licensing fee for the exclusive worldwide license for HCW11-006, a preclinical molecule, from Trimmune. The Company received $3.5 million in gross proceeds, or $2.9 million net of taxes. In addition to the cash portion of the upfront license fee, before taxes, the Company also received a minority co-founder equity interest in Trimmune. In addition, for additional compensation, Trimmune has a option to license the China rights to HCW9302.
Current report
HCW Biologics is eligible to receive additional payments under the license, including development milestone payments and double-digit royalties on future product sales, as well as a portion of the proceeds from certain future transaction(s) involving the licensed molecule, if and when such transaction(s) occur. Upon completion of Phase 1 by the licensee, the Company may exercise its Opt-In Rights to reclaim the rights to the Americas market. For an additional fee, Trimmune may exercise an option to license the China rights to HCW9302, the Company’s clinical-stage molecule, currently being evaluated in a Phase 1 trial in an autoimmune disorder.
Current report
Commercial-Ready Molecules Used as Reagents
Current report
During the year ended December 31, 2025, the Company launched two of its proprietary fusion protein molecules as commercial-ready molecules used as reagents to be used to support the production of immunotherapeutics to treat infectious diseases and cancer. While the Company’s focus remains on the development of fusion immunotherapeutics for the treatment of diseases promoted by chronic inflammation, the Company intends to market these reagents directly or through a corporate partnership to generate revenue which could offset development costs for its immunotherapeutic treatments. On March 13, 2026, Science Advances, a peer-reviewed, high-impact journal, released a publication with the Company’s data that showed the Company’s proprietary, commercial-ready compound, HCW9206, could fundamentally change how CAR-T cell therapies are manufactured and potentially improve how they perform against diseases such as cancer and HIV. These findings support the Company’s belief that HCW9206 is a leap forward in both clinical potential and manufacturing efficiency.
Current report
During the second half of 2025, the Company sold 600,000 shares of Common Stock through its Standby Equity Purchase Agreement (“SEPA”) with Square Gate Capital for an aggregate of approximately $2.5 million in gross proceeds. As of November 20, 2025, the Company will be restricted from using the SEPA for a standstill period of 6 months, in accordance with terms of the November 2025 Inducement Transaction.
Current report
On May 15, 2025, the Company raised $5.0 million before commissions and transaction costs payable by us through the sale of 671,150 Units for $7.45 per Unit, each consisting of one share of Common Stock (or Pre-funded Warrant that may be exercised to purchase one share of Common Stock) plus two Common Stock Warrants each of which can be exercised to purchase one share of Common Stock. The Common Stock Warrants had an exercise price of $7.45 per share, were exercisable immediately upon issuance, and will expire on the five-year anniversary of the original issuance date.
Current report
On November 20, 2025, the Company raised $4.0 million before commissions and transaction costs payable by us through an inducement to exercise warrants to purchase 1,510,205 shares of Common Stock at $2.66 per share. These warrants were issued in November 2024 and May 2025, and immediately before the transaction had an exercise price of $7.45 per share. In addition, the Company agreed to issue to the investor unregistered warrants to purchase an aggregate of 3,020,410 shares of the Company’s Common Stock with an exercise price of $2.41 per share (the “New Warrants”). The New Warrants will be immediately exercisable and will expire on the five and one-half year anniversary of the original issuance date. On January 29, 2026, the SEC declared effective a resale registration statement on Form S-1 (File Number 333-292652) covering the New Warrants.
Current report
On February 19, 2026, the Company raised $1.5 million before commission and transaction costs payable by us through the sale of 2,477,292 Units for $0.6055 per Unit, each consisting of one share of Common Stock (or Pre-funded Warrant that may be exercised to purchase one share of Common Stock) plus one Common Stock Warrant each of which can be exercised to purchase one share of Common Stock. In a private transaction, the Company agreed to reprice the 3,020,410 warrants that were issued in November 2025 from $2.41 per share to $0.0655 per share. The investor’s ability to exercise the Common Stock Warrants issued in this transaction and the reduction of the exercise price for the warrants issued in November 2024 are both subject to stockholder approval. The Company filed a definitive proxy on March 13, 2026 for a Special Stockholders’ Meeting to be held on April 27, 2026.
Current report
An important part of the Company’s future financing plans is the ability to access the public markets for the sale of securities. This requires that the Company remain in compliance with all Nasdaq Listing Rules. As of the date of issuance of these financial audited statements, the Company is compliant with all listing rules of the Nasdaq Capital Market tier.
Current report
On February 26, 2026, the Nasdaq Hearings Panel found that the Company regained compliance with all continued listing rules of The Nasdaq Capital Market. Pursuant to Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor. Pursuant to Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of this letter. If, within that one-year monitoring period, Staff finds the Company again out of compliance with the Equity Rule that was the subject of the exception, the Staff will issue a Delist Determination Letter. In such a case, the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel is unavailable.
Current report
Contract Development and Manufacturing Facility for Biologics
Current report
The Company remains committed to establishing some control over our clinical supply of materials, and the supply of licensed molecules for our licensees, as well as other clinical-stage companies developing biologics. We have retained manufacturing rights for the licensed molecules under our license agreements. With the threat of pharmaceutical tariffs hanging over the biopharmaceutical industry and a push to “re-shore” manufacturing, especially pharmaceuticals, a growing list of major drug makers are bolstering their manufacturing footprints in the U.S.
Current report
For the year ended December 31, 2025, the Company recognized an impairment of $1.5 million related to its Property. In its assessment of potential indicators of impairment of the asset, the Company concluded that during the year, legal procedures were initiated by holders of mechanics liens against the Company’s Property with claims for nonpayment on April 17, 2025, and the Company was notified by Cogent Bank that it exercised its discretion to make a demand that the Company cure the mechanics liens on October 24, 2025. See See Part I, Item 3. – “Legal Proceedings.” The Company has continued to pursue financing alternatives to provide the funding needed to come current in past amounts due and complete the construction and renovation of the Property.
Current report
The Company entered the Wugen License with Wugen at the end of 2020, and we entered a development supply agreement with Wugen to provide it with clinical development materials needed for research and clinical development in Q1 2021. During the year ended December 31, 2025, the Company agreed to a request from Wugen to suspend the Wugen License, which will run for a period of one year from the effective date of the suspension, or until May 29, 2026. The Company expects to generate revenue for ancillary services provided to Wugen during this time, as provided for under the amended Wugen license. During the suspension, the Company is free to enter licenses with other parties for the molecules that are subject of the Wugen license.
Current report
Trimmune License
Current report
Legal Expenses (Recoveries), Net
Current report
Legal expenses (recoveries), net consist of legal fees incurred in connection with the Arbitration and related proceedings involving the Company and Dr. Hing C. Wong, net of insurance reimbursements received.
Current report
Nonoperating Loss
Current report
Impairment of Long-Lived Asset
Current report
For the year ended December 31, 2025, the Company recognized an impairment of $1.5 million related to its building. In its assessment of potential indicators of impairment of the asset, the Company concluded that during the year, legal procedures were initiated by holders of mechanics liens against the Company’s property with claims for nonpayment on April 17, 2025, and the Company was notified by Cogent Bank that it exercised its discretion to make a demand that the Company cure the mechanics liens on October 24, 2025.
Current report
From March 31, 2024 to October 30, 2024, the Company issued $6.9 million in Secured Notes in multiple closings. During the second quarter of 2025, certain noteholders agreed to restructure amounts owed by the Company and convert to equity. Noteholders who purchased notes for $325,000 did not elect to convert their Secured Notes. The Secured Notes bear interest at an annual rate of 9%, payable quarterly in arrears. These noteholders are also entitled to a fixed bonus, payable on the Maturity Date, which is accreted on a straight line basis.
Current report
On May 8, 2025, the Company issued a $150,000 promissory note with a personal guarantee from the Company’s Founder and Chief Executive Officer, which has an original issue discount of $75,000 which is accreted on a straight-line basis from the date of issuance to the Maturity Date of February 7, 2026 (the “Secured Promissory Note”). The Company repaid $225,000 on February 6, 2026.
Current report
Change in Fair Value of Investment and Contingent Liability
Current report
The Company accounts for our investment in Wugen shares at fair value beginning in the second quarter of 2025. Similarly, the Company’s contingent liability is recorded at fair value. A change in fair value of investment and contingent liability is recognized through earnings. Prior to that time, the Company accounted for the Wugen shares using the fair value measurement alternative. Therefore, the value of the investment in Wugen, and similarly the contingent liability, is recognized at fair value each reporting period based on available market information and valuation techniques.
Current report
Gain (Loss) on Sale of Put Shares
Current report
The Company recognizes an unrealized or realized gain or loss on put shares when we sell shares of Common Stock under the SEPA, which is recognized through earnings.
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Removed paragraphs (46)
Previous report
2024 was a pivot point for us. In July 2024, we entered a settlement and general release agreement (“Settlement Agreement”) resolving a long-running arbitration proceeding brought against the Company and Dr. Hing C. Wong, our Founder and Chief Executive Officer, by Altor BioScience, LLC, NantCell, Inc. and ImmunityBio, Inc. (collectively herein, “ImmunityBio”). With the Settlement Agreement, we closed the chapter on an approximately 18-month period during which our clinical development, business development and capital-raising activities were placed substantially on “hold,” awaiting resolution of claims made against us and Dr. Wong by ImmunityBio. See Part I, Item 3. - “Legal Proceedings.” The Settlement Agreement related to the Company’s TOBI Molecules, including HCW9218 and HCW9302, our lead product candidates, among others.
Previous report
The Company retains all rights to develop and commercialize HCW9302, our clinical-stage, lead product candidate for our autoimmune and proinflammatory disease program. In addition, we hold exclusive rights to develop and commercialize HCW9218 in non-oncology indications, as well as HCW9206 and HCW9201 in all indications. The Settlement Agreement had no impact on our exclusive worldwide license agreement with Wugen Inc. (“Wugen License”). We entered the Wugen License in 2020, granting Wugen Inc. (“Wugen”) limited rights to develop cell-based immunotherapeutic treatments for cancer indications using HCW9206 and HCW9201. WU-NK-101, the Wugen product developed using the licensed molecules, is now being evaluated in a Phase 2 clinical study in solid tumors. ImmunityBio controls the supply of HCW9218, and one of the critical components of continuing our development of HCW9218 is successfully obtaining a supply agreement with ImmunityBio.
Previous report
In the fourth quarter of 2024, we revealed a new drug discovery and development platform, with a novel scaffolding or “backbone” of proteins called T-cell Receptor β Chain constant region (“TRBC”). The TRBC platform leverages our in-depth knowledge of T cell and natural killer (“NK”) cell immunology. We have developed molecules in each of these classes for treatments of hematologic and solid tumors, virally infected cells, and cellular senescence diseases associated with aging. TRBC Molecules are grouped into three classes, based on their utilities: Class I: Multi-Functional Immune Cell Stimulators; Class II: Second-Generation Immune Checkpoint Inhibitors and Multi-Specific Targeting Fusions; and Class III: Enhanced Immune Cell Engagers. The Company is making an efficacy assessment using relevant animal models, by the end of 2025, results of these studies are expected to show the optimal construction for lead product candidates(s).
Previous report
With clarity on ownership of intellectual property, the Company reassessed its clinical development pipeline and the future direction of our Company. Our expertise is in immunotherapeutic treatments and our clinical development pipeline will remain so. Our focus continues to be to develop protein-based immunotherapies that are administered by subcutaneous injection. We remain focused on diseases promoted by chronic inflammation driven by senescence, including cancer, especially age-related diseases. The diseases we will target will have no curative FDA approved treatments. Finally, we have selected programs that include life-threatening diseases, such as pancreatic and ovarian cancer, as well as “quality-of-life” indications, such as alopecia areata and senile lentigo. HCW9302 will remain one of our lead product candidates. Future drug discovery and new drug development will be based on TRBC Molecules. There are several potential candidates in each class of TRBC Molecules from which the Company will select lead molecules for each program. Part of this selection will be to determine which TRBC molecules will be developed in-house and which are more appropriate to develop through business development transactions, such as out-licensing agreements.
Previous report
Business Development Transaction
Previous report
On November 17, 2024, the Company entered an exclusive worldwide license agreement with WY Biotech Co., Ltd. (“WY Biotech”), a China-based company specializing in the early-stage development of recombinant protein drugs and gene/cell therapies, to develop and commercialize HCW11-006, one of the Company’s product candidates generated with our TRBC drug discovery platform, for therapeutic use (the “WY License Agreement”). Key terms of the WY License Agreement include that WY Biotech has agreed to pay HCWB $7.0 million in an upfront payment.
Previous report
As the Company disclosed in the Form 8-K filed on March 19, 2025, the Company and WY Biotech agreed to amend the WY Biotech License Agreement due to a delay in WY Biotech coming to a definitive agreement with their designated contract development and manufacturing organization (“CDMO”). Specifically, in order to accommodate the delay, the parties agreed to restructure the payment schedule for the $7.0 million upfront license fees, including delaying the initial $4.0 million portion thereof that was originally due on or about March 17, 2025, to reduce the performance milestones that the Company must complete in order to earn the full $7.0 million nonrefundable upfront payment in June 2025, and to provide that either party may terminate the Agreement if WY Biotech is not able to definitively engage its CDMO by June 2025. Under the amended terms, the Company expects to fulfill our performance obligations and earn the full $7.0 million upfront fee in June 2025. There were no other material changes to the WY Biotech License Agreement, which involves the grant to WY Biotech of an exclusive, world-wide license to use and apply HCW11-006 forin vivo applications. See Exhibits 10.27 and 10.28 to this Annual Report on Form 10-K.
Previous report
The Company has now completed extensive preclinical studies that further support our belief in the potential for HCW11-006 for both anin vivo andex vivo therapy. Thein vivo therapyis licensed by WY Biotech, however, the Company retained all rights to theex vivo therapy and applications as a reagent in cell-based therapy treatments, including cell-based therapies, such as CAR-T therapies. The Company considers WY Biotech License provisions for the Opt-In Right to take over the development of HCW11-006 for the Americas markets to be an important feature of the WY Biotech License. We believe our right to recapture this market is a potentially high value opportunity. Further, we will be able to base our decision to opt-in on the human-data read-out from a Phase 1 clinical trial, which will mitigate our development risks and provide valuable clinical information about the potential for the indications we will use for Phase 2 clinical studies. See Part I, “Business —Out-License Programs.”
Previous report
The Company has identified the Class III TRBC Molecules, Immune Cell Engagers, as the next program for out-licensing. In light of recent transactions coupled with the challenges of clinical development, we plan to take advantage of industry interest in this breakthrough drug. The Company continually assesses our portfolio of molecules in order to identify potential business development opportunities.
Previous report
On February 20, 2024, we sold an aggregate of 1,785,718 shares of our common stock to certain of our officers and directors, at a purchase price of $1.40 per share, for an aggregate purchase price of $2.5 million.
Previous report
Through October 31, 2024, the Company issued an aggregate of $6.9 million in Senior Notes, which are secured by the Company’s shares of Wugen common stock which were consideration for the license fee for the Wugen License. The holders of $6.6 million of the outstanding principal for the Senior Notes have agreed to Principal Terms for the conversion into shares of the Company’s Common Stock at a conversion price of $0.65 per share, warrants to purchase $3.3 million of the Company’s Common Stock at an exercise price of $0.65 per share, and some of the Company’s shares of Wugen common stock. The conversion is subject to stockholder approval. See Part II, Item 9B, “Other Information” for more information on the Special Meeting of the Stockholders.
Previous report
On November 18, 2024, the Company entered a $6.9 million securities purchase agreement with an institutional investor, involving a registered direct offering and a concurrent private placement of common stock and warrants. The offering, priced above market under Nasdaq rules and closed on November 20, 2024. As a result of this offering, the Company issued 6,717,000 shares of Common Stock and warrants to purchase 6,717,000 shares of Common Stock at $1.03 per shares, at a combined price of $1.03 per unit consisting of one share of Common Stock and one five-year warrant to purchase a share of Common Stock.
Previous report
On January 28, 2025, the Company received clearance of its IND from the FDA to initiate a first-in-human Phase 1 dose escalation clinical trial to evaluate one of its lead drug candidates, HCW9302, in patients with moderate-to-severe alopecia areata, a common autoimmune disease in humans that currently has no curative FDA approved treatments.
Previous report
As of December 31, 2024, the Company was required to close the Phase 2 clinical study to evaluate HCW9218 in combination with neoadjuvant chemotherapy in the treatment of ovarian cancer sponsored by the University of Pittsburgh Medical Center, as required under the Settlement Agreement, due to lack of enrollment.
Previous report
WY Biotech License
Previous report
We assessed which activities in the WY Biotech License, as amended, should be considered distinct performance obligations that should be accounted for separately. We concluded that there is one performance obligation relating to the granting of a license and delivery of the Technology Transfer Report for certification of the licensed molecule required to develop the preclinical licensed molecule. Therefore, the Company will not recognize revenue until the Technology Transfer Report is delivered for certification of the licensed molecule, which we anticipate will take place in the second quarter of 2025.
Previous report
Legal Expenses
Previous report
Legal expenses consist of fees incurred by the Company in its own defense and that of officers and employees in connection with a legal matter brought against the Company and Dr. Hing C. Wong, our Founder and Chief Executive Officer, by a former employer of Dr. Wong.
Previous report
During the period ended December 31, 2022, Altor/NantCell initiated legal proceedings against Dr. Wong and the Company. On April 26, 2023, the parties stipulated that Altor/NantCell’s action against the Company would be consolidated with the Altor/NantCell arbitration demand against Dr. Wong. On April 27, 2023, the U.S. District Court for the Southern District of Florida (the “Court”) with jurisdiction over the lawsuit against the Company approved the parties’ stipulation and ordered the parties to arbitration. On May 1, 2023, Altor/NantCell filed a demand against the Company before JAMS. On May 3, 2023, Altor/NantCell dismissed the federal court action without prejudice and the Court ordered the case dismissed without prejudice and closed the case. Proceedings against the Company and Dr. Wong were consolidated in the arbitration before JAMS (the “Arbitration”). On March 26, 2024, Altor/NantCell filed a complaint (the “Complaint”) against the Company in the Chancery Court of the State of Delaware for the contribution of legal fees and expenses advanced to Dr. Wong. The Arbitration hearing was held on May 20, 2024 to May 31, 2024, after which the parties entered into settlement negotiations.
Previous report
Reserve for Credit Losses and Other Expenses
Previous report
The Company recognized a Reserve for credit losses of $5.3 million, reflecting our conclusion that it was not probable that we would recover the interest reserve deposit established upon entering the credit agreement with Prime Capital Ventures (the “Lender”) based on facts known as of December 31, 2023. As reported in the Company’s Form 8-K filed on January 12, 2024, on January 10, 2024, the Company exercised its right to terminate its credit agreement, dated April 21, 2023, with the Lender, as permitted under the terms of the credit agreement. Subsequently, the Lender defaulted on its obligation to return the interest reserve deposit. The Company entered the credit agreement to obtain financing for the purpose of building its proposed manufacturing facility and upgrading its research and laboratory facilities at a property the Company owns in Miramar, Florida.
Previous report
Manufacturing and materials expenses increased by $145,383, or 11%, from $1.3 million for the year ended December 31, 2023 to $1.4 million for the year ended December 31, 2024. For the year ended December 31, 2023, the costs we incurred were primarily for production activities associated with the master cell bank characterization for the high-expressing version of HCW9101, which is used in the manufacturing process for all TOBI-based molecules, including those licensed to Wugen. For the year ended December 31, 2024, costs were primarily attributable to the production of HCW9101.
Previous report
Expenses associated with preclinical activities decreased by $747,900, or 47%, from $1.6 million for the year ended December 31, 2023 to $859,701 for the year ended December 31, 2024. This decrease was primarily attributable to a decline in costs for completing toxicology studies related to IND-enabling activities for HCW9302. In the year ended December 31, 2023, toxicology and other IND-enabling studies were winding down, and we began the process of preparing the IND for submission. In the year ended December 31, 2024, the Company submitted the IND to obtain clearance from the FDA to evaluate HCW9302 in a Phase 1 clinical trial in patients with alopecia areata. The Company received clearance to begin this trial on January 28, 2025.
Previous report
Expenses associated with clinical trials, including patient fees, ancillary studies, clinical site operating expenses, professional fees related to regulatory filings and outside collaborations, decreased by $501,516, or 47%, from $1.1 million for the year ended December 31, 2023 to $558,215 for the year ended December 31, 2024. For the year ended December 31, 2023, the Company had two ongoing clinical studies: (1) an Investigator-sponsored Phase 1 clinical trial at the Masonic Cancer Center, University of Minnesota to evaluate HCW9218 in chemo-refractory/chemo-resistant solid tumors and (2) a Company-sponsored Phase 1b/2 clinical trial to evaluate HCW9218 in advanced pancreatic cancer, with the National Cancer Institute as the lead clinical site. Both of these studies were completed in the first half of 2024.
Previous report
General and administrative expenses increased by $60,081, or 1%, from $6.8 million for the year ended December 31, 2023 to $6.8 million for the year ended December 31, 2024. The increase is mainly attributable to an accretion expense of $527,304 for the accretion of the fixed bonus payment that holders of Secured Notes will receive if the Secured Notes are repaid on their Maturity Date of August 31, 2026 and an increase in other expenses, primarily insurance costs, partially offset by a decrease in salaries and benefits.
Previous report
Salaries, benefits and related expenses decreased by $652,924, or 20%, from $3.2 million for the year ended December 31, 2023 to $2.6 million for the year ended December 31, 2024. There was a $322,214 decrease in salaries and related taxes resulted from a reduction in staff and temporary salary reductions as part of cost reductions which took place in the second quarter. In addition, there was a $304,174 decrease in performance-based bonuses, resulting from the waiver of performance-based bonuses due to officers of the Company that were earned in 2022 and deferred until the time they were waived in the second quarter of 2024.
Previous report
Professional services decreased by $85,994, or 7%, from $1.3 million in the year ended December 31, 2023 to $1.2 million in the year ended December 31, 2024. Professional services include corporate legal services, legal services for procuring patents, as well as other professional services, such as auditing and tax advisory fees. The decrease is primarily attributable to a $117,382 decrease in legal fees incurred in connection with procuring patents, partially offset by a $31,389 increase in fees for other professional services such as audit and tax advisory fees. As a result of the Settlement Agreement, the Company agreed to maintain certain patent protection for rights retained under the Settlement Agreement.
Previous report
Reserve for credit losses and other expenses
Previous report
In the year ended December 31, 2023, the Company recognized a Reserve for credit losses of $5.3 million, reflecting our conclusion that it was not probable that we would recover the interest reserve deposit established upon entering the credit agreement with Prime Capital Ventures (the “Lender”) based on facts known as of December 31, 2023. Subsequent to December 31, 2023, the Lender defaulted on its obligation to refund the interest reserve deposit. In coordination with other entities who were also defrauded by the Lender, the Company continues efforts to recover funds paid for an interest reserve through ongoing receivership and legal remedies.
Previous report
Interest
Previous report
During the year ended December 31, 2024, the Company issued $6.9 million of Secured Notes, which bear interest at a rate of 9% per annum, payable quarterly in arrears. For the year ended December 31, 2024, the Company paid $350,343 for interest on the Senior Notes.
Previous report
Other income, net decreased by $918,935, from $1.0 million for the year ended December 31, 2023 to $86,990 for the year ended December 31, 2024. The decrease is primarily attributable to decreases in interest earned for money market deposits and unrealized gains for investments in U.S. government-backed securities. Other income for the year ended December 31, 2023 also includes rental income of $185,941. On August 15, 2022, the Company entered into a short-term, market-rate lease with the former owner of the building we purchased on the same date. In the year ended December 31, 2023, the lease terminated.
Previous report
The Company and Dr. Wong, our Founder and Chief Executive Officer, entered into a Settlement Agreement and Release of the previously reported Arbitration as of July 13, 2024, subsequently, the Arbitration and related Complaint were dismissed on December 24, 2024. See Part I., Item 3. - “Legal Proceedings.” While the Settlement Agreement has resolved uncertainty regarding the outcome of these proceedings and the ongoing legal expenses, the Company incurred significant legal expenses in the period leading up to the Settlement Agreement. As of December 31, 2024, we reported a balance of $14.4 million for legal fees incurred but not yet paid in the accompany audited balance sheet. Subsequent to the year end, the Company received the benefit of a $2.0 million insurance payment, which was paid directly to the law firm who represented Dr. Wong for his defense during the Arbitration. In order not to overwhelm the Company’s resources, a reasonable payment plan is required, and the Company is engaged in discussions with the law firms involved with this matter.
Previous report
A benefit of reaching a Settlement Agreement and concluding the Arbitration is a release from restrictions related to protection of privileged information, which hampered investor ability to conduct due diligence. As a result, we believe that other avenues of financing are now available to us, namely, capital-raising activities for equity and equity-like investments as well as business development transactions such as out-licensing agreements for rights for our proprietary molecules. However, there can be no assurance of our success in our capital-raising activities. If we are not successful in raising additional capital, we have the ability to revise our business plan and reduce costs. If such revisions are insufficient, we may have to curtail or cease operations.
Previous report
In 2024, we have raised $16.3 million in financings from the following capital-raising activities:
Previous report
On February 20, 2024, we completed a $2.5 million private placement of common stock in which we sold an aggregate of 1,785,718 shares to certain of our officers and directors, at a purchase price of $1.40 per share.
Previous report
As of October 31, 2024, we received approximately $6.9 million from the issuance of Secured Notes. Of the total issuance of Secured Notes, the Company issued $2.9 million to members of the Company’s board of directors and officers, including $2.4 million purchased by Dr. Hing C. Wong, Founder and CEO, $220,000 purchased by Rebecca Byam, Chief Financial Officer, $140,000 purchased by Scott T. Garrett, Chairman of the board of directors, $60,000 purchased by Gary M. Winer, member of the board of directors, $25,000 purchased by Lee Flowers, Senior Vice President for Business Development, and $25,000 purchased by Rick S. Greene, member of the board of directors.
Previous report
On November 20, 2024, the Company closed on an investment from a single institutional investor (the “Purchaser”) in which the Company issued 4,160,000 shares of the Company’s Common Stock and Pre-Funded Warrants to purchase up to 2,557,000 shares of Common Stock in a registered direct offering. In a concurrent private placement, the Company issued unregistered warrants to purchase up to an aggregate of 6,717,000 shares of Common Stock (“Common Stock Warrants”). The combined purchase price for each share and accompanying Common Stock Warrant to purchase one share of common stock is $1.03 per Share and the combined purchase price for each Pre-Funded Warrant and accompany Common Stock Warrant to purchase one share of common stock is $1.0299. The Purchaser elected to exercise the Pre-Funded Warrants on the date of issuance. As a result, the Company issued an aggregate of 6,717,000 shares of Common Stock and Common Stock Warrants to purchase up to an aggregate 6,717,000 shares of Common Stock for a period of five years.
Previous report
Subsequent to the end of the reporting period, on February 20, 2025, the Company entered into an Equity Line of Credit Agreement (“ELOC”) for up to $20.0 million (with the potential to increase by an additional $20.0 million) as another element of the Company’s multi-step financing plan. We intend to register shares that will allow us to access the ELOC based on the financial information included in this Annual Report on Form 10-K.
Previous report
On November 17, 2024, HCW Biologics entered into an exclusive worldwide license agreement with WY Biotech for the rights to develop and commercialize one of HCWB’s preclinical product candidates, HCW11-006. WY Biotech Co., Ltd. is a China-based company specializing in the early-stage development of recombinant protein drugs and gene/cell therapies. As the Company disclosed in the Form 8-K filed on March 19, 2025, the Company and WY Biotech agreed to amend the WY Biotech License Agreement due to a delay in WY Biotech coming to a definitive agreement with their designated contract design CDMO. Specifically, in order to accommodate the delay, the parties agreed to restructure the payment schedule for the $7.0 million upfront license fees, including delaying the initial $4.0 million portion thereof that was originally due on or about March 17, 2025, to reduce the performance milestones that the Company must complete in order to earn the full $7.0 million nonrefundable upfront payments in June 2025, and to provide that either party may terminate the Agreement if WY Biotech is not able to definitively engage its CDMO by June 2025. Under the amended terms, the Company expects to fulfill our performance obligations and earn the full $7.0 million upfront fee in June 2025. There were no other material changes to the WY Biotech License Agreement, which involves the grant to WY Biotech of an exclusive, world-wide license to use and apply HCW11-006 forin vivo applications. In particular, the Company will retain the Opt-In Right thereunder, which gives the Company the option to assume all control and responsibility for the development, manufacture and commercialization of HCW11-006 forin vivo applications in the North America, South America, and Central America. The Company retainsex vivo rights. See Exhibits 10.27 and 10.28 to this Annual Report on Form 10-K.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Reworded paragraphs (37)
Previous wording
HCW Biologics Inc. (“HCWB” or the “Company”) is a clinical-stage biopharmaceutical company developing proprietary immunotherapies to treat diseases promoted by chronic inflammation, especially age-related and senescence-associated diseases. Our immunotherapeutics represent a new class of drug that we believe has the potential to fundamentally change the treatment of cancer and many other diseases and conditions that are promoted by chronic inflammation — and in doing so, improve patients’ quality of life and possibly extend longevity.
Current wording
By leveraging our extensive immunology expertise, we have developed fusion immunotherapeutics representing a new class of drug that we believe has the potential to fundamentally change the treatments for autoimmune diseases, cancer, senescence-associated dysplasia, and many other diseases promoted by chronic inflammation — and in doing so, improve patients’ quality of life and possibly extend longevity.
Previous wording
Our operations have been affected by many headwinds, including inflationary pressures, rising interest rates, ongoing global supply chain disruptions resulting from increased geopolitical tensions such as the war between Russia and Ukraine, the war in the Middle East, China-Taiwan relations, financial market volatility and currency movements. These headwinds, specifically the supply chain disruptions, have adversely impacted our ability to procure certain services and materials, which in some cases impacts the cost and timing of clinical trials and IND-enabling activities. In addition, we have been impacted by inflation when procuring materials required for the buildout of our new headquarters, the costs for recruiting and retaining employees and other employee-related costs. Further, rising interest rates would also increase borrowing costs to the extent that the Company takes on any additional debt. The Company uses a number of strategies to effectively navigate these issues, including product redesign, alternate sourcing, and establishing contingencies in budgeting and timelines. However, the extent and duration of such events and conditions, and resulting disruptions to our operations, are highly unpredictable.
Current wording
Our operations have been affected by many headwinds, including inflationary pressures, tariffs, rising interest rates, ongoing global supply chain disruptions resulting from increased geopolitical tensions such as the war between Russia and Ukraine, the war in the Middle East, China-Taiwan relations, financial market volatility and currency movements. These headwinds, specifically the supply chain disruptions, have adversely impacted our ability to procure certain services and materials, which in some cases impacts the cost and timing of clinical trials and IND-enabling activities. In addition, we have been impacted by inflation when procuring materials required for the buildout of our new headquarters, the costs for recruiting and retaining employees and other employee-related costs. Further, rising interest rates would also increase borrowing costs to the extent that the Company takes on any additional debt. The Company uses a number of strategies to effectively navigate these issues, including product redesign, alternate sourcing, and establishing contingencies in budgeting and timelines. However, the extent and duration of such events and conditions, and resulting disruptions to our operations, are highly unpredictable.
Previous wording
For discussion of risks related to potential impacts of supply chain, inflation, geopolitical and macroeconomic challenges on our operations, business results and financial condition, see Item 1A. “Risk Factors” in this Annual Report.
Current wording
For discussion of risks related to potential impacts of supply chain, inflation, geopolitical and macroeconomic challenges on our operations, business results and financial condition, see Part I, Item 1A. “Risk Factors” in this Annual Report.
Previous wording
We have no products approved for commercial sale and have not generated any revenue from commercial product sales of internally-developed immunotherapeutic products for the treatment of cancer and other age-related diseases. The principal source of our revenues to date have been generated from worldwide exclusive licenses for rights to develop and commercialize some of our proprietary molecules. See Note 1 to our audited financial statements included elsewhere in this Annual Report for more information.
Current wording
We have no products approved for commercial sale and have not generated any revenue from commercial product sales of internally-developed immunotherapeutic products for the treatment of autoimmune disorders, cancer and senescence-associated dysplasia. Since inception, our sole source of revenue is from license and a clinical development supply agreement.
Previous wording
We assessed which activities in the Wugen License should be considered distinct performance obligations that should be accounted for separately. We develop assumptions that require judgement to determine whether the license to our intellectual property is distinct from the research and development services or participation in activities under the Wugen License.
Current wording
Consideration under our contract included a nonrefundable upfront payment, development, regulatory and commercial milestones, and royalties based on net sales of approved products. In addition, the Company earned revenue from supplying Wugen with clinical and research grade materials for clinical development and commercialization of licensed products under a separate development supply agreement. For the recognition of revenue, we assessed which activities in the Wugen License should be considered distinct performance obligations that should be accounted for separately. We develop assumptions that require judgement to determine whether the license to our intellectual property is distinct from the research and development services or participation in activities under the Wugen License.
Previous wording
Performance obligations relating to the granting a license and delivery of licensed product and R&D know-how were satisfied when transferred upon the execution of the Wugen License on December 24, 2020. The Company recognized revenue for the related consideration at a point in time. The revenue recognized from a transaction to supply clinical and research grade materials entered into under the MSA and covered by a Statement of Work, represents one performance obligation that is satisfied over time. The Company recognizes revenue generated for supply of material for clinical development using an input method based on the costs incurred relative to the total expected cost, which determines the extent of the Company’s progress toward completion.
Current wording
Performance obligations relating to the granting a license and delivery of licensed product and R&D know-how were satisfied when transferred upon the execution of the Wugen License on December 24, 2020. The Company recognized revenue for the related consideration at a point in time. The revenue recognized from a transaction to supply clinical and research grade materials entered into under the MSA and covered by a Statement of Work (“SOW”), represents one performance obligation that is satisfied over time. The Company recognizes revenue generated for supply of material for clinical development using an input method based on the costs incurred relative to the total expected cost, which determines the extent of the Company’s progress toward completion.
Previous wording
We expect to derive revenue from a license agreement granting rights to WY Biotech to further develop and commercialize products based on one of our internally-developed molecules. Consideration under our contract included a nonrefundable upfront payment, development, regulatory and commercial milestones, and royalties based on net sales of approved products.
Current wording
We expect to derive revenue from a license agreement granting rights for development and commercialization ofin vivo applications using HCW11-006. Consideration under our contract included a nonrefundable upfront payment, development, regulatory and commercial milestones, as well as royalties based on net sales of approved products. This closing occurred in the first quarter of 2026.
Previous wording
We expense research and development costs as they are incurred. Costs for contract manufacturing are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the agreement, and the pattern of payments for goods and services will change depending on the material. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses and expensed as the related goods are delivered or the services are performed.
Current wording
We expense research and development costs as they are incurred. Costs for contract manufacturing are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the agreement, and the pattern of payments for goods and services will change depending on the material. Nonrefundable advance payments for goods or services to be received in future research and development activities are recorded as prepaid expenses and expensed as the related goods are delivered or the services are performed.
Previous wording
General and administrative expenses consist primarily of employee-related expenses, including salaries, related benefits, and stock-based compensation expense for employees in the executive, legal, finance and accounting, human resources, and other administrative functions. General and administrative expenses also include third-party costs such as insurance costs, fees for professional services, such as legal fees in the ordinary course of business, auditing and tax services, facilities administrative costs, and other expenses.
Current wording
General and administrative expenses consist primarily of employee-related expenses for executive, legal, finance, accounting, human resources and other administrative personnel, as well as professional fees (including legal, audit and tax services), insurance costs, facilities expenses, and other public company compliance costs.
Previous wording
As reported in the Company’s Form 8-K filed on May 1, 2024 with the SEC, the Company became aware that it was the victim of a criminal scheme involving the impersonation of a purchaser upon the default on a legally binding commitment to purchase $8.0 million of secured notes from the Company. The scheme resulted in the misdirection of approximately $1.3 million held in Company accounts to a fraudulent account controlled by a third party. The Company is pursuing all available remedies to recover this loss. Given the limited success that these efforts have had to date for the recovery of funds, the Company recognized a loss of $1.3 million in the year ended December 31, 2024.
Current wording
On May 1, 2024 with the SEC, the Company became aware that it was the victim of a criminal scheme involving the impersonation of a purchaser upon the default on a legally binding commitment to purchase $8.0 million of secured notes from the Company. The scheme resulted in the misdirection of approximately $1.3 million held in Company accounts to a fraudulent account controlled by a third party. The Company is pursuing all available remedies to recover this loss. Given the limited success that these efforts have had to date for the recovery of funds, the Company recognized a nonoperating loss of $1.3 million in for the year ended December 31, 2024 in the accompanying audited statement of operations.
Previous wording
Interest expense includes interest paid on debt. This includes interest due on the Cogent Bank loan and Senior Notes issued by the Company.
Current wording
Interest expense includes interest paid on debt. This includes interest due on the Cogent Bank loan, Secured Notes issued by the Company and accretion of original issue discount and accretion of debt issuance costs.
Previous wording
On August 15, 2022, we entered into a loan and security agreement with Cogent Bank to partially fund our purchase of the property we acquired on that same date. We borrowed $6.5 million under this agreement. Amounts outstanding on the term loan accrue interest at a rate per annum equal to 5.75%. We were obligated to make interest-only payments on this loan from September 2022 through August 2023 and principal and interest payments in 47 equal monthly installments, based on a 25-year maturity schedule, commencing September 15, 2023. We paid $283,042 and $280,794 for interest on this loan for the years ended December 31, 2023 and 2024, respectively.
Current wording
On August 15, 2022, we entered into a loan and security agreement with Cogent Bank to partially fund our purchase of the property we acquired on that same date (the “2022 Loan”). We borrowed $6.5 million under this agreement. Amounts outstanding on the term loan accrue interest at a rate per annum equal to 5.75%. We were obligated to make interest-only payments on this loan from September 2022 through August 2023 and principal and interest payments in 48 equal monthly installments, based on a 25-year maturity schedule, commencing September 15, 2023.
Previous wording
In the year ended December 31, 2024, we recognized $2.6 million of revenue and cost of revenues of $1.6 million. Revenues were derived exclusively from the sale of licensed molecules to Wugen. There is currently one ongoing Phase 1 clinical study evaluating WU-NK-101, the Wugen product candidate created using the licensed molecules, in solid tumors. There were no deferred revenues as of December 31, 2024.
Current wording
For the year ended December 31, 2024, we recognized $2.6 million of revenue and cost of revenues of $1.6 million. Revenues were derived exclusively from the sale of licensed molecules to Wugen. There is currently one ongoing Phase 1 clinical study evaluating WU-NK-101, the Wugen product candidate created using the licensed molecules, in solid tumors.
Previous wording
Research and development expenses decreased by $1.3 million, or 17%, from $7.7 million for the year ended December 31, 2023 to $6.4 million for the year ended December 31, 2024. This decrease was primarily attributable to decreased expenses from preclinical and clinical activities.
Current wording
Research and development expenses decreased by $1.0 million, or 15%, from $6.4 million for the year ended December 31, 2024 to $5.4 million for the year ended December 31, 2025. This decrease was primarily attributable to decreased expenses for manufacturing and materials.
Previous wording
Salaries, benefits and related expenses decreased by $143,609, or 5%, from $2.9 million for the year ended December 31, 2023 to $2.8 million for the year ended December 31, 2024. This decrease was primarily attributable to decreases of $43,850 in salaries and related taxes, $52,383 in the cost of benefits and $42,621 in performance-based bonuses. The Company had a staff reduction in May 2024, and continues to operate with the reduced headcount.
Current wording
Salaries, benefits and related expenses increased by $271,994, or 10%, from $2.8 million for the year ended December 31, 2024 to $3.1 million for the year ended December 31, 2025. This increase was primarily attributable to the suspension of the Wugen license in the second quarter of 2025, which included suspension of the $500,000 annual reimbursement of research and development expenses. As a result, the Company received $62,500 in reimbursements from Wugen for the year ended December 31, 2025. The increase in salaries and related taxes for the year ended December 31, 2025 was partially offset by decreases of $57,799 in employee benefits and $13,182 in expenses for stock-based compensation. The Company had a staff reduction in May 2024, and continues to operate with the reduced headcount.
Previous wording
Other expenses, which include overhead allocations, decreased by $39,680, or 5%, from $787,654 for the year ended December 31, 2023 to $747,974 for the year ended December 31, 2024. This decrease is primarily attributable to decreases of $50,823 in travel and travel-related expenses and $12,695 in facilities-related expenses, partially offset by increases of $19,879 in rent and occupancy costs and $4,407 for public relations activities, such as press releases.
Current wording
Other expenses, which include overhead allocations, decreased by $130,650, or 17%, from $747,974 for the year ended December 31, 2024 to $617,324 for the year ended December 31, 2025. This decrease is primarily attributable to decreases of $120,193 in allocation for depreciation, $10,593 in general office and facilities related expenses and $5,513 in travel and travel-related expenses, which were partially offset by an increase of $8,198 in rent and occupancy costs.
Previous wording
Facilities and office expenses increased by $20,916, or 3%, from $634,080 for the year ended December 31, 2023 to $654,996 for the year ended December 31, 2024, primarily due to increases of $18,290 for janitorial and disposal services and $13,793 for IT services and software licenses, partially offset by a decrease of $12,454 for office equipment and supplies.
Current wording
Facilities and office expenses decreased by $221,708, or 34%, from $654,996 for the year ended December 31, 2024 to $433,288 for the year ended December 31, 2025, primarily due to decreases of $240,138 for software licenses and services needed for active clinical trials and $9,880 for janitorial and disposal services.
Previous wording
There was no accretion in year ended December 31, 2023, but in the year ended December 31, 2024, there was $527,304 in accretion for the fixed bonus payment for Senior Notes issued during 2024. The terms of the Senior Notes were amended in the third quarter of 2024, adding the provision for the fixed bonus payment if the Senior Notes are held to Maturity.
Current wording
For the year ended December 31, 2024, there was $527,304 in accretion for the fixed bonus payment for Senior Notes issued during 2024. As of October 31, 2024, the Company received approximately $6.9 million from the issuance of Secured Notes. The terms of the Senior Notes were amended in the third quarter of 2024, adding the provision for the fixed bonus payment if the Senior Notes are held to Maturity.
Previous wording
Other expenses increased by $191,284, or 15%, from $1.3 million for the year ended December 31, 2023 to $1.4 million for the year ended December 31, 2024. The increase is primarily due to increases of $178,828 in financing-related costs and $162,522 in insurance costs, partially offset by decreases of $138,158 in Delaware franchise taxes and $12,434 in travel-related expenses.
Current wording
Other expenses increased by $215,559, or 15%, from $1.4 million for the year ended December 31, 2024 to $1.7 million for the year ended December 31, 2025. The increase is primarily due to increases of $190,361 for financing costs which includes expenses related to registering the shares underlying the SEPA, as required by the terms of our agreement, and commissions earned on sale of shares of Common Stock under the SEPA and $134,744 increase in property and casualty insurance, partially offset by decreases of $77,737 in other insurance costs and $23,592 in travel-related expenses.
Previous wording
As of December 31, 2024, our principal source of liquidity was $4.7 million in cash and cash equivalents, including money market investments, and as a result, there was substantial doubt over whether the Company had sufficient capital to operate for the next twelve months from the issuance date of this Annual Report. We considered elements of our financing plan that were probable and likely to be implemented within the next year. While we have already begun to successfully execute our financing plan, including a $6.9 million financing and a license agreement with $7.0 million in minimum guarantees payments which the Company expects to receive in 2025, we concluded that remaining steps in our financing plan are not probable and thus they were not sufficient to include in our going concern analysis.
Current wording
As of December 31, 2025, the Company had $2.0 million in cash and cash equivalents, including money market investments, and as a result, there was substantial doubt over whether the Company had sufficient capital to operate for the next twelve months from the issuance date of this Annual Report. We considered elements of our financing plan that were probable and likely to be implemented within the next year. While we have already begun to successfully execute our financing plan, including raising $16.3 million for the year ended December 31, 2024 and $11.5 million for the year ended December 31, 2025. In addition, during year ended December 31, 2025, the Company strengthened our balance sheet by extinguishing $7.7 million of debt through restructuring and conversion to equity, including restructuring $7.4 million of Secured Notes and accumulated accretion of a fixed bonus payable upon Maturity Date and converting $270,000 of unsecured promissory notes according to the terms in the agreement, as well as entering settlement agreements with vendors regarding past due amounts owed which resulted in reducing accounts payable by $5.5 million as of December 31, 2025.
Previous wording
On March 3, 2025, the Nasdaq Hearings Panel (the “Panel”) of The Nasdaq Stock Market LLC (“Nasdaq” or the “Exchange”) granted the Company an extension in which to regain compliance with all Nasdaq continued listing rules. The Panel’s determination followed a hearing on February 13, 2025, at which the Panel considered the Company’s plan to regain compliance with Listing Rules 5450(a)(1), 5450(b)(2)(A) and 5450(b)(2&3)(C), the minimum bid price (“Bid Price”), the market value of publicly held securities (“MVPHS”) and the market value of listed securities (“MVLS”) rules, respectively. As a result of the extension, the Panel granted the Company’s request for continued listing on the Exchange, provided that the Company demonstrates compliance with the Bid Price Rule by April 28, 2025, and all other Exchange continued listing rules by June 15, 2025.
Current wording
On March 3, 2025, the Nasdaq Hearings Panel (the “Panel”) of The Nasdaq Stock Market LLC (“Nasdaq” or the “Exchange”) granted the Company an extension in which to regain compliance with all Nasdaq continued listing rules. The Panel’s determination follows a hearing on February 13, 2025, at which the Panel considered the Company’s plan to regain compliance with Listing Rules 5450(a)(1), 5450(b)(2)(A) and 5450(b)(2&3)(C), the minimum bid price (“Bid Price”), the market value of publicly held securities (“MVPHS”) and the market value of listed securities (“MVLS”) rules, respectively. As a result of the extension, the Panel granted the Company’s request for continued listing on the Exchange, provided that the Company demonstrates compliance with the Bid Price Rule by April 28, 2025, and all other Exchange continued listing rules by June 15, 2025.
Previous wording
As reported in the Company’s Form 8-K filed on July 18, 2024 and further described in Part I, Item 3. – “Legal Proceedings” below, as of July 13, 2024, the Company and Dr. Hing C. Wong, the Company’s Founder and Chief Executive Officer, entered into a confidential Settlement Agreement and Release (the “Settlement Agreement”) with Altor BioScience, LLC (“Altor”), NantCell, Inc. (“NantCell”), and ImmunityBio, Inc. (the parent of Altor and NantCell, together with Altor and NantCell, “ImmunityBio”), to resolve the previously disclosed Arbitration before JAMS brought by Altor and NantCell as well as a Complaint Altor filed against the Company in the Chancery Court of the State of Delaware for the contribution of legal fees and expenses advanced to Dr. Wong. The Settlement Agreement includes mutual general releases by and among the parties thereto. No party is required to make any monetary payments to any other party or person under the Settlement Agreement and each party will bear its own expenses incurred in connection with the matter. In accordance with the provisions of the Settlement Agreement, upon completion of these procedures, the parties mutually stipulated that the Arbitration and Complaint should be dismissed. The Arbitration and related Complaint were dismissed on or about December 24, 2024.
Current wording
As reported in the Company’s Form 8-K filed on July 18, 2024 and further described in Part I, Item 3. – “Legal Proceedings” below, as of July 13, 2024, the Company and Dr. Hing C. Wong, the Company’s Founder and Chief Executive Officer, entered into a confidential Settlement Agreement and Release (the “Settlement Agreement”) with ImmunityBio and its affiliates. The Settlement Agreement includes mutual general releases by and among the parties thereto. No party is required to make any monetary payments to any other party or person under the Settlement Agreement and each party will bear its own expenses incurred in connection with the matter. In accordance with the provisions of the Settlement Agreement, upon completion of remedial procedures, the parties stipulated that the Arbitration and Complaint should be dismissed. The Arbitration and related Complaint were dismissed on December 24, 2024.
Previous wording
On August 15, 2022, the Company entered into the 2022 Loan Agreement with Cogent Bank, pursuant to which it received $6.5 million in proceeds to purchase a building that will become the Company's new headquarters. The loan is secured by a first priority lien on the building. As of December 31, 2024, certain subcontractors have filed mechanics liens related to unpaid invoices issued in connection with the Company’s construction of its new manufacturing facilities and upgraded research laboratories. On December 16, 2024, BE&K Building Group, the prime contractor on the project, sent the Company a draft, unfiled lawsuit and requested the parties discuss payment. On January 22, 2025, the Company entered into a forbearance agreement with BE&K to allow the Company until March 31, 2025 to continue efforts to find the financing required to complete the construction and renovation of the building. Pursuant to the forbearance agreement, the Company made an initial payment of $1.0 million in partial satisfaction of amounts owing to BE&K and its subcontractors. The 2022 Loan Agreement contains a provision for a discretionary default in the event that the Company fails to pay sums due in connection with construction of any improvements; however, as of the reporting date, to our knowledge, the lender has not elected to do so. As of December 31, 2024, the Company has reflected this loan as Short-term debt, net, to reflect that the lender has the right to accelerate the loan under a discretionary default provision at any time. See Part II, Item 9A. -- “Controls and Procedures.” The Company continues to seek the financing required to complete the construction project, with the cooperation of the lender and lien holders.
Current wording
The Company owns a property which we are renovating to create offices, laboratories, and a biologics manufacturing facility to produce clinical trial quantities of material to serve our needs, the needs of our licensees, and other small clinical-stage immunotherapeutic companies. We are actively seeking financing to complete this project. On August 15, 2022, the Company entered into a loan and security agreement (the “2022 Loan Agreement”) with Cogent Bank, pursuant to which it received $6.5 million in proceeds to purchase our property at which the Company planned to build a facility to manufacture biologics and upgrade its research laboratory facilities. The loan is secured by a first priority lien on the property. As of December 31, 2025, certain subcontractors had filed mechanics liens related to unpaid invoices issued in connection with construction. The 2022 Loan Agreement contains a provision for a discretionary default in the event that the Company fails to pay sums due in connection with construction of any improvements; however, as of the reporting date, the lender has not elected to do so. As of December 31, 2025, the Company has reported the balance $6.2 million for this loan as Short-term debt, net. As discussed below, on October 24, 2025, the Company was notified by Cogent Bank that it exercised its discretion to make a demand that the Company cure mechanics liens.
Previous wording
costs, timing, and outcome of regulatory review of our product candidates;•number of trials required for regulatory approval;
Current wording
costs, timing, and outcome of regulatory review of our product candidates;
Previous wording
impact of arbitration, litigation, regulatory inquiries, or investigations, as well as costs to indemnify our officers and directors against third-party claims related to our patents and other intellectual property:
Current wording
impact of future arbitration, litigation, regulatory inquiries, or investigations, as well as costs to indemnify our officers and directors against third-party claims related to our patents and other intellectual property:
Previous wording
cost and timing of buildout of the Company’s new headquarters, including manufacturing for biologics and upgraded research and development facilities, including risks of cost overruns and delays, and ability to obtain additional financing, if needed; and
Current wording
cost and timing of buildout of the Company’s new manufacturing and laboratory facilities, including manufacturing for biologics and upgraded research and development facilities, including risks of cost overruns and delays, and ability to obtain additional financing, if needed;
Previous wording
Net cash used in operating activities was $22.5 million for the year ended December 31, 2023 and $14.2 million for the year ended December 31, 2024.
Current wording
Net cash used in operating activities was $14.2 million for the year ended December 31, 2024 and $13.4 million for the year ended December 31, 2025.
Previous wording
Cash used in operating activities for the year ended December 31, 2024 consisted primarily of a net loss of $30.0 million, which includes $15.9 million of legal expenses related to legal proceedings and a $1.3 million loss related to a misdirection of funds resulting from the Company being a victim of criminal activity. Cash provided by operating activities included a $11.9 million increase resulting from the increase of accounts payable and other liabilities; a $1.0 million increase resulting from a decrease in accounts receivable; and a $831,622 increase related to a decrease in prepaid expenses and other assets. Adjustments for noncash changes also gave rise to an increase in cash from operating activities, including increases of $1.2 million for depreciation, amortization and accretion and a $1.0 million from unrealized losses.
Current wording
Cash used in operating activities for the year ended December 31, 2024 consisted primarily of a net loss of $30.0 million, which includes $15.9 million of legal expenses related to legal proceedings and a $1.3 million loss related to a misdirection of funds resulting from the Company being a victim of criminal activity. Cash provided by operating activities included an $11.9 million increase resulting from the increase of accounts payable and other liabilities; a $1.0 million increase resulting from a decrease in accounts receivable; and an $831,622 increase related to a decrease in prepaid expenses and other assets. Adjustments for noncash changes also gave rise to an increase in cash from operating activities, including increases of $1.2 million for depreciation, amortization and accretion and a $1.0 million from unrealized losses.
Previous wording
For the year ended December 31, 2024, cash used in investment activities was $261,617, consisting of cash used for construction of our new headquarters and manufacturing facility.
Current wording
For the year ended December 31, 2024, cash used in investing activities was $261,617, consisting of cash used for construction of our new headquarters and manufacturing facility. There was no cash used in or provided by investing activities for the year ended December 31, 2025.
Previous wording
For the year ended December 31, 2024, cash provided by financing activities was $15.7 million, consisting of $6.5 million of cash provided through the issuance of common stock, $6.9 million of cash provided through the issuance of Secured Notes, $2.9 million of cash provided through the issuance of warrants, partially offset by $119,398 of cash used for debt repayment and $638,045 of cash used for issuance costs for common stock and warrants.
Current wording
For the year ended December 31, 2024, cash provided by financing activities was $15.6 million, consisting of $6.5 million of cash provided through the issuance of Common Stock, $6.9 million of cash provided through the issuance of Secured Notes, $2.9 million of cash provided through the issuance of Common Stock Warrants, partially offset by $119,398 of cash used for debt repayment and $638,045 of cash used for issuance costs for Common Stock and Common Stock Warrants.
Previous wording
As of December 31, 2023, we had $28,693 of obligations remaining in the lease terms for non-cancellable operating lease agreements related to our facilities in Miramar, Florida. Effective March 1, 2022, we entered into a lease extension for our current location for a period of two years, ending February 29, 2024. On January 30, 2024, we entered into a new one-year lease for the same location, effective March 1, 2024. On January 27, 2025, we entered into a Lease Modification and Extension Agreement for a one-year lease for the same location, effective March 1, 2025.
Current wording
The Company has a non-cancellable operating lease agreements related to our facilities in Miramar, Florida. Effective on March 1, 2022, we entered into a lease extension for our current location for a period of two years, ending February 29, 2024. On January 30, 2024, we entered into a new one-year lease for the same location, effective on March 1, 2024. On January 27, 2025, we entered into a Lease Modification and Extension Agreement for a one-year lease for the same location, effective on March 1, 2025. On February 2, 2026, we entered a Lease Modification and Extension Agreement for a one-year lease, effective on March 1, 2026.
Previous wording
In the normal course of business, we enter into contracts for non-clinical studies, preclinical testing, and other services and products. These contracts generally provide for termination following a certain period after notice and therefore we believe that our non-cancellable obligations under these agreements are not material.
Current wording
We have commitments with a third-party manufacturing organization to supply us with clinical grade materials. As of December 31, 2025, we are under contract for obligations of $396,100 that we expect to pay during the year ending December 31, 2026. In the normal course of business, we enter into contracts for non-clinical studies, preclinical testing, and other services and products. These contracts generally provide for termination following a certain period after notice and therefore we believe that our non-cancellable obligations under these agreements are not material.
Previous wording
On August 15, 2022, we entered into a loan and security agreement with Cogent Bank to partially fund our purchase of the property that will become our new headquarters. The agreement provides for a term loan of up to $6.5 million. Amounts outstanding on the term loan will accrue interest at a fixed rate per annum equal to 5.75%. We were obligated to make interest-only payments on the term loan from September 2022 through August 2023 and principal and interest payments in 47 equal monthly installments, based on a 25-year amortization schedule, commencing September 15, 2023 followed by one final balloon payment of all remaining principal, interest and fees due on the maturity date of August 15, 2027. Our obligations under the agreement are secured by, among other things, a mortgage on our new corporate headquarters and related real property. As of December 31, 2024, $6.3 million was outstanding under the term loan and we were in current in our interest and principal payments. In accordance with the terms of our loan and security agreement, the Company maintains an account at Cogent Bank as security, with a balance sufficient for the payment of interest, principal and insurance costs for a period of 90 - 120 days.
Current wording
On August 15, 2022, we entered into a loan and security agreement with Cogent Bank to partially fund our purchase of the property that will become our new headquarters. The agreement provides for a term loan of up to $6.5 million. Amounts outstanding on the term loan will accrue interest at a fixed rate per annum equal to 5.75%. We were obligated to make interest-only payments on the term loan from September 2022 through August 2023 and principal and interest payments in 47 equal monthly installments, based on a 25-year amortization schedule, commencing September 15, 2023 followed by one final balloon payment of all remaining principal, interest and fees due on the maturity date of August 15, 2027. Our obligations under the agreement are secured by, among other things, a mortgage on our new corporate headquarters and related real property. As of December 31, 2025, $6.2 million was outstanding under the term loan and we were in current in our interest and principal payments. In accordance with the terms of our loan and security agreement, the Company maintains an account at Cogent Bank as security, with a balance sufficient for the payment of interest, principal and insurance costs for a period of 90 - 120 days.
Previous wording
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Current wording
Level 2: Inputs, other than the quoted prices in active markets, which are observable either directly or indirectly; and
Previous wording
Dividend yield—The expected dividend yield is 0% because the Company has not historically paid, and does not expect, for the foreseeable future, to pay a dividend on its common stock.
Current wording
Dividend yield—The expected dividend yield is 0% because the Company has not historically paid, and does not expect, for the foreseeable future, to pay a dividend on our Common Stock.
Previous wording
As of December 31, 2023 and 2024, we had available federal net operating loss (“NOL”) carryforwards of $40.0 million and $62.2 million, respectively. We also had available state NOLs carryforwards of approximately $40.0 million and $62.3 million, as of December 31, 2023 and 2024, respectively. The federal and state NOLs will carryforward indefinitely. The federal NOLs are available to offset 80% of taxable income for state taxes for tax years starting after 2020. In addition, we had federal research and development credits carryforwards of $1.3 million and $1.5 million, as of December 31, 2023 and 2024, respectively. These credits are available to reduce future federal income taxes, if any, and carryforwards expire from 2038 through 2044 and are subject to review and possible adjustment.
Current wording
As of December 31, 2024 and 2025, we had available federal net operating loss (“NOL”) carryforwards of $62.2 million and $70.0 million, respectively. We also had available state NOLs carryforwards of approximately $62.3 million and $70.2 million, as of December 31, 2024 and 2025, respectively. The federal and state NOLs will carryforward indefinitely. The federal NOLs are available to offset 80% of taxable income for state taxes for tax years starting after 2020. In addition, we had federal research and development credits carryforwards of $1.5 million and $1.7 million, as of December 31, 2024 and 2025, respectively. These credits are available to reduce future federal income taxes, if any, and carryforwards expire from 2038 through 2045 and are subject to review and possible adjustment.
Previous wording
Under Sections 382 and 383 of the Code, substantial changes in our ownership may limit the amount of NOL and research and development credit carryforwards that could be used annually in the future to offset taxable income. The tax benefits related to future utilization of federal and state NOL carryforwards, credit carryforwards, and other deferred tax assets may be limited or lost if cumulative changes in ownership exceeds 50% within any three-year period. We have not completed a Section 382/383 analysis under the Code regarding the limitation of NOL and credit carryforwards. If a change in ownership were to have occurred, the annual limitation may result in the expiration of NOL carryforwards and credits before utilization.
Current wording
Under Sections 382 and 383 of the Code, substantial changes in our ownership may limit the amount of NOL and research and development credit carryforwards that could be used annually in the future to offset taxable income. The tax benefits related to future utilization of federal and state NOL carryforwards, credit carryforwards, and other deferred tax assets may be limited or lost if cumulative changes in ownership exceeds 50% within any three-year period. We have not completed a Section 382/383 analysis under the Code regarding the limitation of NOL and credit carryforwards. If a change in ownership were to have occurred, the annual limitation may result in the expiration of credits before utilization.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
When we were notified of deficiencies in compliance with Nasdaq listing rules, we requested and were granted an opportunity to present our plan to regain compliance to Nasdaq. On October 13, 2025, the Panel granted the Company an extension in which to regain compliance with all continued listing rules of the Exchange. The Panel’s determination follows the Company’s hearing on September 25, 2025, at which the Company presented, and the Panel considered, the Company’s plan to regain compliance with the Equity Rule. The Panel granted the Company’s request for continued listing on the Exchange, subject to, among other things, the Company demonstrating compliance with the Equity Rule by December 31, 2025, and with all other Exchange continued listing rules by February 16, 2026.
Current report — wording carried from elsewhere
number of trials required for regulatory approval;
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
We derive revenue from a license agreement granting rights to Wugen to further develop and commercialize products based on two of our internally-developed molecules. Consideration under our contract included a nonrefundable upfront payment, development, regulatory and commercial milestones, and royalties based on net sales of approved products. Additionally, HCW Biologics retained manufacturing rights and has agreed to provide Wugen with clinical and research grade materials for clinical development and commercialization of licensed products under separate agreements.
Previous report — wording carried elsewhere
In the year ended December 31, 2023, we recognized $2.8 million of revenue and cost of revenues of $2.3 million. Revenues were derived exclusively from the sale of licensed molecules to Wugen. There were no deferred revenues as of December 31, 2023.
Previous report — wording carried elsewhere
As reported in the Company’s Form 8-K filed on May 1, 2024 with the SEC, the Company became aware that it was the victim of a criminal scheme involving the impersonation of a purchaser upon the default on a legally binding commitment to purchase $8.0 million of secured notes from the Company. The scheme resulted in the misdirection of approximately $1.3 million held in Company accounts to a fraudulent account controlled by a third party. The Company pursued all available remedies to recover this loss and reported this matter to legal authorities. Given the limited success that these efforts for the recovery of funds, the Company recognized a loss of $1.3 million in the year ended December 31, 2024.
Previous report — wording carried elsewhere
We have commitments with a third-party manufacturing organization to supply us with clinical grade materials. As of December 31, 2024, we are under contract for obligations of $1.2 million that we expect to pay during the year ending December 31, 2025. As of December 31, 2023, we had commitments to fund $6.9 million in construction costs related to the buildout of our new headquarters and manufacturing facility.
Previous report — wording carried elsewhere
As of December 31, 2024, certain subcontractors have filed mechanics liens related to unpaid invoices issued in connection with the Company’s construction of its new manufacturing facilities and upgraded research laboratories. The loan agreement with Cogent Bank contains a provision for a discretionary default in the event that the Company fails to pay sums due in connection with construction of any improvements; however, as of the reporting date, the lender has not elected to do so. As of December 31, 2024, the Company has reflected this loan as Short-term debt, net, to reflect that Cogent Bank has the right to accelerate the loan under a discretionary default provision, even though they have not elected to do so. The Company continues to seek the financing required to complete the construction project, with the cooperation of the lender and lien holders. See Part II, Item 9A. -- “Controls and Procedures.”